Budgeting, While Painful, Makes Sense

By Pat Nowak Mentioning the word “budget” can make smiles turn into frowns. Nobody likes talking about the dreaded “B word.” Responsible and hard-working adults avoid the idea of budgeting or planning their spending. Most people, enjoying their lives, feel they work hard and can spend the way they want. Being reminded of mindfulness concerning money can make them become testy. Today, many people over 50 are still suffering from past economic declines. This is the time to explore what a budget can do for you.

A budget guides your spending

Directing available dollars to be used wisely – it need not be restrictive. Budgeting takes into consideration the things that you really want out of life, and makes them a priority. Having a budget is not a sign that you are careless or that you easily get into debt, although not having a plan for spending prudently can leave some in a difficult financial position.

Some things to be mindful of:

Have you been shopping when you saw something that was an unnecessary purchase but you just whipped out the credit card, and it was yours? In 2015, the average credit card debt per household was over $15,000. Many of those charge balances arose because the spender was not giving thought to whether the purchase was truly necessary. A budget, an objective and predetermined spending plan, can prevent getting in over your head. A budget tracks expenses and income so that a scheduled insurance premium or income tax payment will not come as a surprise — the budget reflects yearly financial obligations, keeping a record of when bills are due. And if an emergency arises, you will be more likely to have the money to deal with it. A budget allows you to track your spending, providing a perspective on where you can save– are you spending too much on credit cards or on expenditures like dining, golf or the holidays. Should you take a step back and save some cash for a fabulous trip, a business idea, or to help your children with education plans?

Planned spending

Failing to plan your spending can lead to wasting money. It is far too easy to overspend when it comes to regular purchases of consumables like food, entertainment, and convenience items. A stop for a drink soon becomes two and your simple $10 bill now is $25 – keep that up and you can be spending hundreds of dollars a month; money that you can’t get back. A budget allows you to have and plan money goals. Travelling around the world, buying a cottage up north or saving more money for other reasons can all be attained by paying attention to the dollars coming in and the dollars going out. A monthly budget can help you trim the fat from your spending while saving for things that you really want. Budgeting also helps you to look more critically when making purchasing decisions. Should you select a giant television or choose a more modest model, priced considerably less? We all want to be financially secure. We all have goals we want to achieve and the best way to achieve those goals is to be mindful of you money. A budget can help you do that. Instead of thinking of a budget as a penance, look at it positively, as a way to make your dreams come true.

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